The choice of the capacity level used to allocate budgeted fixed manufacturing costs to products can greatly affect the product-cost information available to managers.

Question

Quizplus · Accepted Answer

The level of capacity chosen affects the amount of fixed manufacturing costs allocated to each product, which in turn affects the product-cost information available to managers. Choosing a different capacity level can lead to different cost assignments and therefore affect decision-making.

The Choice of the Capacity Level Used to Allocate Budgeted